How Budgeting Can Help You Pay Off Your Student Loans

Still, even the definition is one most would think is beneath them or a bit depressing; “A little pouch or knapsack, which may have come from a Gaulish (Celtic language) source that’s related to the Irish bolg, or “bag.”

The word turned up in English in the fifteenth century, having traveled via the French bougette, a diminutive form of bouge, or “leather bag.”

Budgeting So You Can Pay Off Your Student Loans

Indeed it can be depressing to think about a “budget.”

However, if you discipline your spending, this can actually be fun.

Like anything, once the habit is formed and you taste a little success, you’ll see that it suits you.

(Did you know? One of the biggest reasons borrowers fall behind on their monthly payments is because they cannot afford the high monthly payments their servicers are requiring them to pay. Learning how to budget your money is one of the many ways to ease the stress of making payments on time, and lowering your student loan payment is one the best ways to help with budgeting. Here are 9 ways to lower a student loan payment.Click here to learn more and get the free guide).

Can I Do It?

Of course, this is a very general framework, and everyone is different.

Some folks have massive debt totaling half their income, and others are debt free.

If you don’t use a budget already, this method could be a great way for you to get started.

It also takes less time and effort than some traditional budgets, where you plan every expense down to a specific category.

But, it’s also more detailed than a budget where you just track how much you have in the bank and make sure to spend less.

There is a little wiggle room you can take advantage of.

Pay Yourself First

Growing the 20% first is the best way to start.

The Center for Retirement Research at Boston College found that individuals earning the average wage should be saving at least 15 %of their income for retirement alone before looking at things like emergency funds and other savings.

If you are going to use the 50/30/20 rule, consider shifting around the percentages a bit to focus more on savings, investments, and debt payoff.

You can even make it the 50% category, then split the remainder of your living expenses and fun spending into the other 50%.

The more you save and the faster you can get out of debt, the better.

Now Get to It!

Here are a few key ways to get started because, be honest, we procrastinate!

You know that word.

You live that word…so get going!

You need to know where you’re money is going.

Some folks can have a sticky note on their computer to track expenses, others must keep a list.

Either way, know exactly where your money is going.

You’d be shocked at just how much more attentive this will make you.

Adopt a two day rule while shopping.

If you see something, wait two days.

If you really need it (or want it, actually), it’ll still be there this weekend.

Come up with a few short and long term money goals, and write them down.

Maybe you want to put as much money possible away each month toward your student loans.

Maybe your goal is to go on a dream vacation, build a six-month emergency fund, or stop living paycheck to paycheck.

You’d be surprised at the peace of mind of having just an extra $1,000 cash in your dresser.

After realizing how much I spent eating out, I said goodbye to Panera, and hello to bagged lunches.

If you work in an office, make Sunday a Trader Joe’s day.

If you’re not a great cook, they have delicious, pre-made salads and sandwiches for a third of the cost of eating out.

(Bonus Tip! One of the biggest reasons borrowers fall behind on their monthly payments is because they cannot afford the high monthly payments their servicers are requiring them to pay. Learning how to budget your money is one of the many ways to ease the stress of making payments on time, and lowering your student loan payment is one the best ways to help with budgeting. Here are 9 ways to lower a student loan payment.Click here to learn more and get the free guide).

But all you really need is a way to plan what you want your money to do for you

Whether that’s an Excel spreadsheet, YNAB, Mint, or even pen and paper.

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